China's benchmark Shanghai Composite closed at its lowest levels since August 23 on Friday due to concerns of tight liquidity while trade in the rest of Asia was mixed following a record close on the Dow overnight.
Chinese money market rates rose for a third straight session with the benchmark seven-day bond repurchase agreement hitting its highest level since June 24. The move came even after the People's Bank of China's took emergency steps on Thursday to inject liquidity into selected banks.
"Trade today will be interesting from an Asian-centric point of view, as the Chinese repo rates continue to react to policy changes around banking. The changes by the PBOC and the central government are very positive steps towards a more liberal and freely floating interbank lending rate, and provide insight into the steps that may be taken to see a freely floating CNY in years to come, said Evan Lucas, market strategist at IG in a note.